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Hims & Hers Health, Inc. Reports First Quarter 2023 Financial Results and Raises Full Year 2023 Outlook

Revenue of $190.8 million, up 88% year-over-year in Q1 2023

Net loss of $10.1 million; Adjusted EBITDA profitability of $6.1 million in Q1 2023

Subscribers grew to over 1.2 million, up 87% year-over-year in Q1 2023

Raises full year 2023 revenue guidance to a range of $810 million to $830 million and Adjusted EBITDA guidance to a range of $25 million to $30 million

SAN FRANCISCO, May 08, 2023--(BUSINESS WIRE)--Hims & Hers Health, Inc. ("Hims & Hers" or the "Company", NYSE: HIMS), the leading health and wellness platform, today reported financial results for the first quarter ended March 31, 2023.

"We are pleased with our outstanding performance in the first quarter, as our ability to deliver more personalized and accessible products and services is inspiring more customers to take better care of their health and well-being," said Andrew Dudum, co-founder and CEO. "Our significant market opportunity, robust consumer demand and consistent execution across our four strategic pillars – trusted brand, leading technology, product innovation and clinical excellence – uniquely positions us as a trusted market leader."

"Our resilient customer base and durable recurring revenue model is operating at a scale that enables us to generate high growth while generating incremental efficiencies," said Yemi Okupe, CFO. "These dynamics enable us to unlock our market opportunity from a position of strength and we expect to continue delivering leading innovation and access to care to our customers to capitalize on our growth momentum while driving operational excellence."

Key Business Metrics

(In Thousands, Except for Monthly Online Revenue per Average Subscriber and AOV, Unaudited)

Three Months Ended March 31,

2023

2022

% Change

Subscribers (end of period)

1,209

646

87

%

Monthly Online Revenue per Average Subscriber

$

55

$

52

6

%

Net Orders

2,047

1,207

70

%

AOV

$

90

$

78

15

%

Revenue

(In Thousands, Unaudited)

Three Months Ended March 31,

2023

2022

% Change

Online Revenue

$

184,175

$

94,102

96

%

Wholesale Revenue

6,595

7,212

(9

) %

Total revenue

$

190,770

$

101,314

88

%

First Quarter 2023 Financial Highlights

  • Revenue was $190.8 million for the first quarter of 2023 compared to $101.3 million for the first quarter of 2022, an increase of 88% year-over-year.

  • Gross margin was 80% for the first quarter of 2023 compared to 74% for the first quarter of 2022.

  • Net loss was $(10.1) million for the first quarter of 2023 compared to $(16.3) million for the first quarter of 2022.

  • Adjusted EBITDA was $6.1 million for the first quarter of 2023 compared to $(6.1) million for the first quarter of 2022.

A reconciliation of Adjusted EBITDA, a non-GAAP measure, to net loss, its most comparable financial measure under generally accepted accounting principles in the United States ("U.S. GAAP"), has been provided in this press release in the accompanying tables. Additional information about Adjusted EBITDA is also included below under the heading "Non-GAAP Financial Measures".

Financial Outlook

Hims & Hers provides guidance based on current market conditions and expectations for revenue and Adjusted EBITDA, which is a non-GAAP financial measure.

For the second quarter 2023, we expect:

  • Revenue of $200 million to $205 million.

  • Adjusted EBITDA of $4 million to $7 million, reflecting an Adjusted EBITDA margin of 2% to 3%.

For the full year 2023, we expect:

  • Revenue of $810 million to $830 million.

  • Adjusted EBITDA of $25 million to $30 million, reflecting an Adjusted EBITDA margin of 3% to 4%.

The guidance provided above constitutes forward-looking statements and actual results may differ materially. Refer to the "Cautionary Note Regarding Forward-Looking Statements" safe harbor section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

We have not reconciled forward-looking Adjusted EBITDA to its most directly comparable U.S. GAAP measure, net loss, because we cannot predict with reasonable certainty the ultimate outcome of certain components of such reconciliations, including market-related assumptions that are not within our control, or others that may arise, without unreasonable effort. For these reasons, we are unable to assess the probable significance of the unavailable information, which could materially impact the amount of future net loss. See "Non-GAAP Financial Measures" for additional important information regarding Adjusted EBITDA.

Conference Call

Hims & Hers will host a conference call to review the first quarter 2023 results on May 8, 2023, at 5:00 p.m. ET. The conference call can be accessed by dialing +1 (888) 510-2630 for U.S. participants and +1 (646) 960-0137 for international participants, and referencing conference ID #1704296. A live audio webcast will be available online at https://investors.forhims.com/. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call at the same link.

About Hims & Hers Health, Inc.

Hims & Hers is the leading health and wellness platform on a mission to help the world feel great through the power of better health.

We believe how you feel in your body and mind transforms how you show up in life. That’s why we’re building a future where nothing stands in the way of harnessing this power. Hims & Hers normalizes health & wellness challenges—and innovates on their solutions—to make feeling happy and healthy easy to achieve. No two people are the same, so the Company provides access to personalized care designed for results.

For more information, please visit https://investors.forhims.com/.

Cautionary Note Regarding Forward-Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be identified by the use of forward-looking terminology, including the words "believe," "estimate," "anticipate," "expect," "assume," "imply," "intend," "plan," "may," "will," "potential," "project," "predict," "continue," "could," or "should," or, in each case, their plural, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our financial outlook and guidance, including our mission to drive top-line growth and profitability and our ability to attain our long-term financial targets; our expected future financial and business performance, including with respect to the Hims & Hers platform, our marketing campaigns, our market opportunity, investments in innovation, and our infrastructure, and the underlying assumptions with respect to the foregoing; statements relating to events and trends relevant to us, including with respect to our financial condition, results of operations, short- and long-term business operations, objectives, and financial needs; expectations regarding our mobile applications, market acceptance, user experience, customer retention, brand development, our ability to invest and generate a return on any such investment, customer acquisition costs, operating efficiencies and leverage (including our fulfillment capabilities), the success of our business model, our market opportunity, our ability to scale our business, the growth of certain of our categories, our ability to innovate on and expand the scope of our offerings and experiences, our ability to reinvest into the customer experience, and our ability to comply with the extensive, complex and evolving regulatory requirements applicable to our business, including without limitation state and federal healthcare, privacy and consumer product quality laws and regulations. These statements are based on management’s current expectations, but actual results may differ materially due to various factors.

The forward-looking statements contained in this press release are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in the "Risk Factors" section of each of our most recently filed Quarterly Report on Form 10-Q, our most recently filed Annual Report on Form 10-K, and any of our subsequent filings with the Securities and Exchange Commission (the "Commission").

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in reports we have filed or will file with the Commission, including our most recently filed Annual Report on Form 10-K, our most recently filed Quarterly Report on Form 10-Q, and any of our subsequent filings with the Commission. In addition, even if our results of operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in such reports, those results or developments may not be indicative of results or developments in subsequent periods.

Key Business Metrics

As our business grows and evolves, we continually and strategically review our key metrics. Beginning with our 2022 Annual Report on Form 10-K, we commenced reporting "Subscribers" and "Monthly Online Revenue Per Average Subscriber" as additional key business metrics (as defined below). As a result of broadening the number of health and wellness categories we serve, we believe it is important to measure the holistic relationship that we have with our customers. Additionally, the recurring nature of our revenue necessitates the need for metrics that provide greater visibility into both the breadth and engagement of users on our platform. We believe Subscribers represent a more accurate reflection of the number of distinct users that we have on our platform relative to the number of subscriptions, and beginning with the three months ending March 31, 2023, we are no longer reporting "Subscriptions" as a key business metric. Monthly Online Revenue per Average Subscriber reflects how users’ engagement with products across our platform is evolving. These changes are intended to better align our key business metrics with our internal priorities and business plans.

"Online Revenue" represents the sales of products and services on our platform, net of refunds, credits, and chargebacks, and includes revenue recognition adjustments recorded pursuant to U.S. GAAP, primarily relating to deferred revenue and returns reserve. Online Revenue is generated by selling directly to consumers through our websites and mobile applications. Our Online Revenue consists of products and services purchased by customers directly through our online platform. The majority of our Online Revenue is subscription-based, where customers agree to be billed on a recurring basis to have products and services automatically delivered to them.

"Wholesale Revenue" represents non-prescription product sales to retailers through wholesale purchasing agreements. We sell only non-prescription products to wholesale partners. In addition to being revenue generative and profitable, wholesale partnerships have the added benefit of generating brand awareness with new customers in physical environments.

"Subscribers" are customers who have one or more "Subscriptions", which are agreements pursuant to which they have agreed to be automatically billed on a recurring basis at a defined cadence. The Subscription billing cadence is typically defined as a number of months (for example, billed every month or every three months), which are excluded from our reporting when payment has not occurred at the contracted billing cadence. Subscribers can cancel Subscriptions in between billing periods to stop receiving additional products and services and can reactivate Subscriptions to continue receiving additional products and services.

"Monthly Online Revenue per Average Subscriber" is defined as Online Revenue divided by "Average Subscribers", which amount is then further divided by the number of months in a period. "Average Subscribers" are calculated as the sum of the Subscribers at the beginning and end of a given period divided by 2.

"Net Orders" are defined as the number of online customer orders minus transactions related to refunds, credits, chargebacks, and other negative adjustments. Net Orders represent transactions made on our platform during a defined period of time and exclude revenue recognition adjustments recorded pursuant to U.S. GAAP.

Average Order Value ("AOV") is defined as Online Revenue divided by Net Orders.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In Thousands, Except Share and Per Share Data, Unaudited)

March 31, 2023

December 31, 2022

(Unaudited)

Assets

Current assets:

Cash and cash equivalents

$

48,745

$

46,772

Short-term investments

135,648

132,853

Inventory

20,697

21,562

Prepaid expenses and other current assets

20,435

15,408

Total current assets

225,525

216,595

Restricted cash

856

856

Goodwill

110,881

110,881

Intangibles, net

20,909

21,841

Operating lease right-of-use assets

4,548

4,936

Other long-term assets

13,587

11,232

Total assets

$

376,306

$

366,341

Liabilities and stockholders' equity

Current liabilities:

Accounts payable

$

37,609

$

32,363

Accrued liabilities

14,121

12,448

Deferred revenue

2,866

1,472

Operating lease liabilities

1,687

1,658

Total current liabilities

56,283

47,941

Operating lease liabilities

3,217

3,649

Earn-out liabilities

3,977

2,975

Other long-term liabilities

84

35

Total liabilities

63,561

54,600

Commitments and contingencies

Stockholders' equity:

Common stock – Class A shares, par value $0.0001, 2,750,000,000 shares authorized and 200,934,421 and 200,051,689 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively; Class V shares, par value $0.0001, 10,000,000 shares authorized and 8,377,623 shares issued and outstanding as of March 31, 2023 and December 31, 2022

21

21

Additional paid-in capital

667,531

656,626

Accumulated other comprehensive loss

(111

)

(277

)

Accumulated deficit

(354,696

)

(344,629

)

Total stockholders' equity

312,745

311,741

Total liabilities and stockholders' equity

$

376,306

$

366,341

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In Thousands, Except Share and Per Share Data, Unaudited)

Three Months Ended March 31,

2023

2022

Revenue

$

190,770

$

101,314

Cost of revenue

37,345

26,558

Gross profit

153,425

74,756

Gross margin %

80

%

74

%

Operating expenses:(1)

Marketing

97,245

48,093

Operations and support

26,182

15,683

Technology and development

10,748

6,088

General and administrative

30,513

21,811

Total operating expenses

164,688

91,675

Loss from operations

(11,263

)

(16,919

)

Other income:

Change in fair value of liabilities

(295

)

441

Other income, net

1,877

320

Total other income, net

1,582

761

Loss before income taxes

(9,681

)

(16,158

)

Provision for income taxes

(386

)

(94

)

Net loss

(10,067

)

(16,252

)

Other comprehensive income (loss)

166

(186

)

Total comprehensive loss

$

(9,901

)

$

(16,438

)

Net loss per share attributable to common stockholders:

Basic and diluted

$

(0.05

)

$

(0.08

)

Weighted average shares outstanding:

Basic and diluted

207,140,298

202,695,970

______________

(1)

Includes stock-based compensation expense as follows (in thousands):

Three Months Ended March 31,

2023

2022

Marketing

$

996

$

823

Operations and support

1,154

486

Technology and development

1,461

906

General and administrative

10,556

6,641

Total stock-based compensation expense

$

14,167

$

8,856

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands, Unaudited)

Three Months Ended March 31,

2023

2022

Operating activities

Net loss

$

(10,067

)

$

(16,252

)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

2,117

1,741

Stock-based compensation

14,167

8,856

Change in fair value of liabilities

295

(441

)

Net (accretion) amortization on securities

(1,041

)

971

Provision (benefit) for deferred taxes

49

(112

)

Impairment of long-lived assets

429

Non-cash operating lease cost

448

377

Non-cash acquisition-related costs

566

69

Non-cash other

75

(163

)

Changes in operating assets and liabilities:

Inventory

865

1,415

Prepaid expenses and other current assets

(4,984

)

(7,677

)

Other long-term assets

5

(30

)

Accounts payable

3,955

4,266

Accrued liabilities

1,673

(3,148

)

Deferred revenue

1,394

(2,043

)

Operating lease liabilities

(463

)

(384

)

Earn-out payable

(6,848

)

Net cash provided by (used in) operating activities

9,483

(19,403

)

Investing activities

Purchases of investments

(40,687

)

(84,881

)

Maturities of investments

39,084

82,340

Proceeds from sales of investments

22,291

Investment in website and mobile application development and internal-use software

(1,875

)

(1,197

)

Purchases of property, equipment, and intangible assets

(635

)

(100

)

Net cash (used in) provided by investing activities

(4,113

)

18,453

Financing activities

Proceeds from exercise of vested stock options

245

891

Payments for taxes related to net share settlement of equity awards

(3,657

)

(404

)

Payments for earn-out consideration for acquisitions

(23,014

)

Net cash used in financing activities

(3,412

)

(22,527

)

Foreign currency effect on cash and cash equivalents

15

(23

)

Increase (decrease) in cash, cash equivalents, and restricted cash

1,973

(23,500

)

Cash, cash equivalents, and restricted cash at beginning of period

47,628

72,640

Cash, cash equivalents, and restricted cash at end of period

$

49,601

$

49,140

Reconciliation of cash, cash equivalents, and restricted cash

Cash and cash equivalents

$

48,745

$

48,284

Restricted cash

856

856

Total cash, cash equivalents, and restricted cash

$

49,601

$

49,140

Supplemental disclosures of cash flow information

Cash paid for taxes

$

286

$

36

Non-cash investing and financing activities

Purchase of property and equipment included in accounts payable

$

1,290

$

Vesting of early exercised stock options

38

Non-GAAP Financial Measures

In addition to our financial results determined in accordance with U.S. GAAP, we present Adjusted EBITDA (which is a non-GAAP financial measure), and Adjusted EBITDA margin (which is a non-GAAP ratio), each as defined below. We use Adjusted EBITDA and Adjusted EBITDA margin to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that Adjusted EBITDA and Adjusted EBITDA margin, when taken together with the corresponding U.S. GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations, or outlook. We consider Adjusted EBITDA and Adjusted EBITDA margin to be important measures because they help illustrate underlying trends in our business and our historical operating performance on a more consistent basis. We believe that the use of Adjusted EBITDA and Adjusted EBITDA margin is helpful to our investors as they are used by management in assessing the health of our business and our operating performance.

However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool, and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP financial measures or ratios differently or may use other financial measures or ratios to evaluate their performance, all of which could reduce the usefulness of Adjusted EBITDA or Adjusted EBITDA margin as tools for comparison. Reconciliations are provided below to the most directly comparable financial measures stated in accordance with U.S. GAAP. Investors are encouraged to review our U.S. GAAP financial measures and not to rely on any single financial measure to evaluate our business.

Adjusted EBITDA is a key performance measure that our management uses to assess our operating performance. Because Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes. "Adjusted EBITDA" is defined as net loss before stock-based compensation, depreciation and amortization, acquisition-related costs (which includes consideration paid for employee compensation with vesting requirements incurred directly as a result of acquisitions, inclusive of revaluation of earn-out consideration recorded in general and administrative expenses), impairment of long-lived assets, income taxes, change in fair value of liabilities, and interest income. "Adjusted EBITDA margin" is defined as Adjusted EBITDA divided by revenue.

Some of the limitations of Adjusted EBITDA include (i) Adjusted EBITDA does not properly reflect capital commitments to be paid in the future, and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures. In evaluating Adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items. We compensate for these limitations by providing specific information regarding the U.S. GAAP items excluded from Adjusted EBITDA. When evaluating our performance, you should consider Adjusted EBITDA in addition to, and not as a substitute for, other financial performance measures, including our net loss and other U.S. GAAP results.

Net Loss to Adjusted EBITDA Reconciliation

(In Thousands, Unaudited)

Three Months Ended March 31,

2023

2022

Revenue

$

190,770

$

101,314

Net loss

(10,067

)

(16,252

)

Stock-based compensation

14,167

8,856

Depreciation and amortization

2,117

1,741

Acquisition-related costs

646

116

Impairment of long-lived assets

429

Provision for income taxes

386

94

Change in fair value of liabilities

295

(441

)

Interest income

(1,913

)

(175

)

Adjusted EBITDA

$

6,060

$

(6,061

)

Net loss as a % of revenue

(5

) %

(16

) %

Adjusted EBITDA margin

3

%

(6

) %

View source version on businesswire.com: https://www.businesswire.com/news/home/20230508005588/en/

Contacts

Investor Relations
Alice Lopatto
Investors@forhims.com

Media Relations
Press@forhims.com

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